The board may appoint Hewlett-Packard director and former
EBay Inc. CEO Meg Whitman as Apotheker’s successor, possibly on
an interim basis, said one of the people, who asked not to be
named because the plans aren’t public. The board also is
reconsidering a proposal to spin off the company’s personal-computer unit, another person said.

Hewlett-Packard has lowered its sales forecasts three times
since Apotheker became CEO in November, and he’s presided over
strategy swings that left shareholders doubting his credibility.
Before today, the company’s stock has plunged 47 percent on his
watch, and “investor exasperation” with management is at its
highest in more than a decade, according to Toni Sacconaghi, an
analyst at Sanford C. Bernstein & Co.

“There’s certainly a lot of investor discontent with
them,” said Amit Daryanani, an analyst at RBC Capital Markets
in San Francisco, who rates the shares “sector perform” and
doesn’t own them. “There’s widespread frustration with the fact
that numbers have been cut three times since he’s been there.”

Hewlett-Packard rose $1.51, or 6.7 percent, to $23.98 today
on the New York Stock Exchange after Bloomberg reported the
possible management change.

Revisiting the Spinoff

Hewlett-Packard’s board, due to meet this week, is open to
re-examining the spinoff proposal now because some directors
think the idea wasn’t studied as thoroughly as other high-profile spinoffs, such as one by Kraft Foods Inc., the person
familiar with the matter said. At the same time, the turmoil
raises the possibility that some or all of Hewlett-Packard may
become a takeover candidate.

The possible spinoff would take as long as 18 months to
complete, Hewlett-Packard said at the time. That elicited
criticism that it should have had a buyer lined up or a more
concrete plan in place before making the announcement.

Whitman, who joined Hewlett-Packard’s board in January
after a failed bid to become California’s governor last year,
had a mixed record at EBay. CEO for a decade, she took the
company public and pioneered e-commerce for small businesses.
Yet in the final years of her tenure, she couldn’t halt a
slowdown in sales growth and overpaid for Skype Technologies SA
after a bidding war with Google Inc. and Yahoo! Inc.

Not Long-Term?

Her lack of experience in computing for large companies may
mean she doesn’t stay in the role for long, said Jayson Noland,
an analyst at Robert W. Baird & Co. in San Francisco.

“She’s on the board and is a logical interim CEO, but not
a logical long-term CEO,” said Noland, who has a “neutral”
rating on the stock. “She doesn’t have enterprise experience.”

Pressure on Apotheker intensified on Aug. 18, when he
announced a sweeping overhaul that included a $10.3 billion
acquisition of Autonomy Corp. and the possible PC spinoff. He
also killed off the company’s WebOS tablets and smartphones,
just five months after vowing to put the operating system on a
full range of the company’s computers.

The shares plunged 20 percent following the announcement,
fueled by concerns that Autonomy was too expensive and the plans
showed a lack of deliberation. The stock slumped to the point
that other breakup and takeover scenarios are possible, Hewlett-Packard investor Michael Mullaney said at the time.

‘Scoop It Up’

“For the right company, it probably would make sense for
someone to come in and scoop it up,” Mullaney, who helps manage
$9.5 billion at Fiduciary Trust in Boston, said in August.
“Someone could come and at least buy pieces of the firm.”

The server unit would boost Oracle Corp.’s share fivefold
and help it become the biggest maker of the hardware. Hewlett-Packard’s printer business, which is 70 percent more profitable
than the company as a whole, may also attract private-equity
firms, Mullaney said.

While the PC spinoff would help Hewlett-Packard focus on
higher-margin products, such as services and software, the way
it was conveyed didn’t satisfy shareholders, Sacconaghi said.
The Autonomy deal, meanwhile, hasn’t been popular, he said.

“Our conversations with investors continue to point to
near universal opposition of the Autonomy acquisition, due to
its high price,” he wrote in a Sept. 13 report.

Undoing Autonomy

By paying cash for Autonomy, Hewlett-Packard doesn’t need
approval from its own shareholders to complete the deal,
Sacconaghi said.

The company can’t undo the takeover unless Autonomy
investors fail to approve it, according to a person with
knowledge of the terms. That outcome is unlikely, given that 42
percent of Autonomy shares had already been tendered in favor of
the sale as of Sept. 12, this person said.

Apotheker, the former CEO of German software maker SAP AG,
has aimed to transform Hewlett-Packard into a provider of more
profitable software and services for businesses that are doing
more computing on remote servers, via the so-called cloud. Yet,
results have been plagued by tepid demand for PCs, as consumers
in growing numbers snapped up competing mobile devices and
tablets, such as Apple Inc.’s iPad.

Short Stint

His tenure at Hewlett-Packard may barely outlast his 10-month stint as CEO of SAP. He resigned in February 2010 after an
attempted price increase during the recession that rankled
consumers and a clash with German unions on plans to cut jobs.
He presided over the company’s first revenue decline since 2003
as customers delayed software purchases.

Apotheker joined Hewlett-Packard after Mark Hurd departed
as CEO amid a scandal over a personal relationship with a
company contractor. Hurd now is a co-president at Oracle.

Hewlett-Packard isn’t looking to completely change course,
said Baird’s Noland. The company’s board and shareholders are
mostly looking for a surer hand, he said.

“The board is directionally behind the plan Apotheker’s
put in place,” Noland said. “It’s just the execution of that
plan that has investors wound up.”